Joint venture arrangements are one of the fastest ways to get new customers. They work because you “borrow” the credibility, trust and customer base of another organization. Regardless of the business you are in or the products or services you offer, there already exists a number of organizations that have established relationships with your target market. The joint venture process enables you to leverage those existing relationships and, in the process, generate a flood of new customers.
There have been a number of $1,000+ courses written on this subject that include hundreds of pages and dozens of legal forms. But for most small businesses, these types of courses can be more intimidating than inspiring. I’m here to tell you that you can create lucrative joint venture relationships, easier and faster than you ever thought possible. The fact is, at its root, this method is so straightforward and so immediately effective you owe it to yourself to test it in your business.
The building blocks of this method are simple. First you must have a handle on who your target audience is. Then you create a list of potential joint venture partners. Next, you create the offer you wish to make to your target audience. Then you approach the organizations you identified as potential joint venture partners and present your case. Finally, you and your partner iron out the details of the joint venture agreement. Sound simple? It is! So let’s get to it!
Identify your target audience:
Do you know who you are marketing to? Have you already identified your target audience? This is a crucial step in the process because you must get your message into the hands of people who will respond to it. The best offer in the world will fall as flat as a pancake if you don’t get it into the hands of the right people.
One quick way to identify your target audience is to profile the top 20% of your existing customer base. A detailed customer profiling discussion is beyond the scope of this article but if you can identify the commonalities that your best customers share, you are well on the way to identifying the essential elements of your target audience. Once you have done so, it’s time to move on to the next step which is:
Identify potential joint venture partners:
In this step you first identify the types of organizations and businesses your target market already has a relationship with. For example, if your target market is golfers, your list might include golf courses, golf shops, athletic stores, golf cart manufacturers, and so on. Once you have listed the type of businesses your target prospect is likely to do business with, you can then list the organizations within each type of business.
In this phase, you develop a list of actual organizations who likely do business with your ideal prospect. By identifying the types or classes of business before the actual organizations you will find that you automatically broaden the scope of your potential joint venture partner list. Armed with your list of potential partners it is time to move on to the next step, where you:
Create the offer you want to communicate to your target audience:
As you will be making the offer through your joint venture partner(s), you will want to make your offer special. The phones won’t be ringing off the hook if all you offer is a 10% discount. You want the reader to perceive that they are getting something special as a result of their relationship with your joint venture partner. So give them something special!
Free always works (see Part 2 of this series) and so does buy one get one free. You could offer an extended guarantee or warranty, or a sizeable discount. You could offer a sneak preview of a sale or an invitation to a special event. Whatever you decide to offer, make it so special that your potential joint venture partner(s) will immediately see the value in your offer and your target market will feverishly respond to it.
Approach your potential joint venture partners with your offer:
Before approaching each partner, it’s a good idea to research a little about the way they do business. Do they endorse or promote other businesses? If so, how do they do so? What types of offers do they promote? You want to get a sense for joint venture projects they have already agreed to. Then, package your first project in a similar way.
You can approach your joint venture partners through any medium you wish. This is one area where email communications tend to be least effective. My favorite way of contacting potential joint venture partners is by phone. But some small business owners don’t have the time (or the inclination) to do a little cold calling so I also recommend that you mail your potential partners a letter highlighting the benefits of your joint venture proposition (as discussed below) for them and their customers.
About a week after mailing the letter you will receive a call from your potential partners. If not, you simply call them. By following up your letter with a phone call you can increase the effectiveness of your campaign three-fold! Best of all, there is no cold calling with this method!
Of course, if your potential partner is local and easily approachable in person, head on over and discuss your idea face to face. You’ll often leave a personal meeting with an agreement and plan securely in place.
If your potential joint venture partner has not participated in a joint venture before, be prepared to educate him or her on the process and how it creates a win-win-win result. Their customers win because they get a special deal because of their relationship with your joint venture partner, the joint venture partner wins because they benefit from the agreement (we’ll discuss this more in a moment) and you win because you get to extend your offer to more highly targeted, potential customers. This method truly creates a win-win-win result!
Ironing out the details of your agreement:
The specifics of your agreement with your potential joint venture partner will need to be defined and agreed upon. They could involve a share of the profit you receive from the sales related to their endorsement, or you could barter your product or service in exchange for their endorsement. It could be that you agree to endorse their offering to your customer base in an endorsement exchange scenario. Your options are limited only by your creativity.
You will also want to define your roles and expectations of each other. This includes any operational and financial arrangements you have made. For example, if you propose a mailing, it is best if the mailing appears to come from your joint venture partner, written on their letter head.
It may also be that your partner collects the funds from such a mailing and sends you an amount equal to the payment less their commission and you fulfill the order. The more complex the agreement, the more attention you will have to pay to operational and financial processes, roles and expectations. But this is true of any business agreement, right?
Here’s a BIG TIP when creating your proposal for your joint venture partner, make it as easy as possible for them to benefit from the project. The less they do, the better. The closer you can get to “money for nothing,” the more responsive your potential partner will be.
While I’m at it here’s another BIG TIP: make your first project a guaranteed success, pull out all the stops and make sure that everyone benefits. Put together a great offer for your target audience, reward you partner for their participation and make sure that everyone has a positive experience. Do this and your joint venture partner will be excited about the next opportunity to work with you. And as I’m sure you know, the real profit in your business comes not from the initial sale, but from repeatedly selling to your customer base. Are you with me?
What do you do now?
You get started! Schedule a 30 minute appointment with yourself (I’m serious – what gets scheduled gets done) and follow the outline I have shared with you in this article. At least get to the point where you have identified several joint venture partners. You can easily do this if you invest the time.
Remember, a joint venture doesn’t have to be complex. It can be as simple as agreeing to do a mutual exchange where you and your partner distribute each other’s business cards. Once you complete your first successful joint venture and see how effective they can be, you will be hooked! So schedule that appointment with yourself now!
Now you know the basic process for creating joint venture projects. The process is the same regardless of the scale of your project.
For those who pursue this method of marketing their small business the rewards can be great. You really can create an avalanche of new customers sales and profit in your small business with joint venture marketing. The question is will you?
Join me next time for the fourth and final installment in this series where we will discuss how you can generate thousands of dollars worth of publicity for your business, completely free of charge.